let’s talk: the PA PURCHASE PROCESS
Hey Guys!
We made it to 2021- thank G*d. Luckily, after 6 days in, we got 3 new properties under contract already for various clients! One of these is a new client of mine -a group of NJ investors who wanted to get started in the Philly world of REI. This was their first purchase in Philly and they asked for a quick overview of the purchase process and required documentation. Thought it might be good to share for anyone looking to buy or invest here! OR for anyone looking to become a PA real estate agent!
So, as we do, let’s talk Real Estate, let’s talk the PA PURCHASE PROCESS…
Now I want to start by saying this is how the process “should” play out. It almost never happens this way and bumps along the way are inevitable! But below is the path to home buying and the documentation needed to get it done!
Step 1: Get a pre-approval
Contact your local bank or mortgage broker to get a pre-approval. It should be a super quick process!
Step 2: Find a real estate agent you like
Call around, talk to several until you find one you click with! In the home buying process, you may spend a ton of time with this person, so make sure they are tolerable. They are also helping you make one of the biggest financial decisions of your life, so I would make sure they seem responsible! Once you find an agent you like, you may be asked to sign an Exclusive or Non-Exclusive Agency Agreement. I personally always have my buyers sign a Non-Exclusive Agency Agreement. I don’t want to force them to always work with me if they do not want to. Essentially what the Non-Exclusive agreement does is say that for any house I show you, I will represent you as your agent, but if you look at houses outside of me and want to work with another buyer’s agent that is totally fine.
Step 3: Go look at properties
The fun part!
Once you find a house you like…
Step 4: Submit an offer!
Your agent will help you come up with a competitive offer that makes sense for all parties.
Here are the docs required to submit an offer here.
Agreement of Sale (AOS)
Pre-Approval
Sometimes you will also be asked to submit a signed;
Seller’s Disclosure (SPD)
Lead Based Paint Disclosure (LBPD)
Step 5: Offer is signed!
Once the offer is accepted and signed by the the seller, the clock starts on all contract dates!
Step 6: Order Title
It is the buyer’s (& buyer’s agent) job to order the title work and collect the EMD (earnest money deposit). You can order title on most title companies websites.
Step 7: Send your lender the final Agreement of Sale so they can start their work ASAP
If an appraisal is required, the lender will work with the buyer’s agent and listing agent to schedule this.
Step 8: Schedule Home Inspection (if applicable)
This is done by the buyer and buyer’s agent. Buyer picks the home inspector and schedule the inspection. Buyer’s agent confirms the time and date are OK with the seller. In PA, the buyer and buyer’s agent may attend, but do not have to. It is frowned upon for the seller or seller’s agent to be in attendance.
Step 9: Buyer’s agent will need to collect signatures from the buyer on the following documents
These documents are EXP specific, to be honest, I am not sure what other brokerages do.
Consumer Notice
Wire Fraud Advisory
Affiliated Business Disclosure
Buyer’s Estimated Closing Costs
Step 10: Lender + Title do their thing
Lender works on – underwriting, costs and fees
Title Company works on – clearing title, and finalizing the ALTA/HUD Settlement Statement for closing
Step 11: Closing!
Once you get the “clear to close” from your lender, the title company will work with all parties to schedule closing.
This is a super brief overview BUT the buying process can BE SCARY so hopeful this helps a soon to be home buyer or new real estate agent out there. Curious for any agents outside of PA, is this process similar to yours!?
HAPPY WEDNESDAY!
Erin
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